Based on recent reports, the legal situation for cryptocurrency in China in 2025 has become even more restrictive. While China has had a series of crackdowns on crypto for years, the most recent developments indicate a significant escalation.
CRYPTO LEGALITY IN CHINA:
Total Ban on Ownership: On May 30, 2025, China reportedly passed sweeping legislation that bans the personal ownership of all cryptocurrencies, including Bitcoin $BTC and Ethereum $ETH . This is a significant step beyond previous bans on trading and mining.
Criminalization of Holdings: The new legislation makes it a crime to hold digital assets privately. This is a strategic move to eliminate any competition to China's state-backed central bank digital currency, the digital yuan, which provides the government with complete traceability of financial activity.
Focus on the Digital Yuan: The ban is a key part of China's strategy to promote its own digital currency. The government views cryptocurrencies as a threat to its financial control, as they empower individuals and can facilitate capital flight.
Continued Crackdown: The ban is a continuation of a long-standing government effort to control the crypto space. Previous actions included banning banks from handling Bitcoin, shutting down crypto exchanges, and a full ban on crypto mining in 2021.
It's important to note that while mainland China has an absolute ban, the Special Administrative Region of Hong Kong has a different and more open approach. Hong Kong is working to become a regulated hub for virtual assets, with a licensing regime for exchanges and regulations for stablecoins. This has created a "workaround" for mainland investors who can gain exposure to crypto by buying shares in Hong Kong-listed firms that deal in digital assets.
